| So, there may be more, but there are at least four types of goods one might hold: * Consumer/durable goods meant to be used - i.e. dishwashers, houses you live in, furniture * Appreciating assets meant to grow long-term wealth - i.e. ownership shares in productive companies expected to last a while and earn profits, houses you rent to others, land itself * Bets and hedges - i.e. insurance policies, credit default swaps, futures contracts, the Bengals at +3500 or whatever * A medium of exchange - some highly liquid, low fee, stable-valued token meant to be held temporarily to eliminate the need for either direct barter or trust in delayed-delivery transactions Cryptocurrency just needs to get its story straight on which of these it is. Clearly a good can cross categories. People make bets in foreign exchange markets for currencies, as well as hedges when they actually do business internationally. Even owner-occupied housing can be seen as a strategy to grow intergenerational wealth. Beanie babies and baseball cards are consumer goods that may or may not over some limited period of time see dramatic increases in dollar-denominated value. But fundamentally, you don't want a medium of exchange to cross over into other categories, at least not often. Rapidly decreasing value causes panic and social collapse. Rapidly increasing value encourages holding rather than spending, which brings the productive economy to a halt. Even just having direct use value may do that. You don't want collectible stamps or commemorative silver coins to be a primary medium of exchange because many holders will not want to exchange them, and same problem, the trade of real goods grinds to a halt. Cryptocurrencies seemed to start off as a basically sound idea. Hashcash and proof of work were originally developed as anti-spam, anti-DoS measures. Make a client prove it did a bunch of useless work before it can send a request or message, as a natural rate-limiter. Satoshi came along and realized the tokens generated by this useless work have some level of fundamental value, and when traded on a blockchain, can allow for trustless transactions without the need for a single authority. All fine. But as soon as it got pulled almost entirely into the realm of speculators whose primary aim is to increase the dollar-denominated value of the tokens, it lost any potential to replace normal currency. I don't think there is anything inherently bad or immoral about people sending each other what amounts to gigantic piles of dirt proving they have the strongest automated digging machine and convincing others who have a lot of cash that buying the dirt piles is a better wealth growing strategy than buying companies and land and other traditional investments, but it isn't exactly the revolution we were promised. |